SUNFLAG IRON & STEEL 2020-21 Annual Report Analysis

Wed, 31 Mar

SUNFLAG IRON & STEEL has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

SUNFLAG IRON & STEEL Income Statement Analysis

• Operating income during the year rose 7.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 48.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.4% in FY21 as against 9.7% in FY20.
• Depreciation charges increased by 51.9% and finance costs decreased by 30.5% YoY, respectively.
• Other income declined by 2.1% YoY.
• Net profit for the year grew by 51.5% YoY.
• Net profit margins during the year grew from 5.3% in FY20 to 7.4% in FY21.

SUNFLAG IRON & STEEL Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	17,581	18,916	7.6%
Other income	Rs m	112	110	-2.1%
Total Revenues	Rs m	17,693	19,025	7.5%
Gross profit	Rs m	1,706	2,533	48.4%
Depreciation	Rs m	462	702	51.9%
Interest	Rs m	413	287	-30.5%
Profit before tax	Rs m	944	1,654	75.2%
Tax	Rs m	18	251	1,316.9%
Profit after tax	Rs m	926	1,403	51.5%
Gross profit margin	%	9.7	13.4
Effective tax rate	%	1.9	15.2
Net profit margin	%	5.3	7.4

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SUNFLAG IRON & STEEL Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 4 billion as compared to Rs 6 billion in FY20, thereby witnessing an decrease of -24.8%.
• Long-term debt stood at Rs 1 billion as compared to Rs 1 billion during FY20, a growth of 8.3%.
• Current assets fell 3% and stood at Rs 9 billion, while fixed assets rose 1% and stood at Rs 15 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 24 billion as against Rs 24 billion during FY20, thereby witnessing a fall of 0%.

SUNFLAG IRON & STEEL Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	13,852	15,329	10.7
Current Liabilities	Rs m	5,928	4,456	-24.8
Long-term Debt	Rs m	1,236	1,338	8.3
Total Liabilities	Rs m	24,089	23,984	-0.4
Current assets	Rs m	9,426	9,171	-2.7
Fixed Assets	Rs m	14,663	14,813	1.0
Total Assets	Rs m	24,089	23,984	-0.4

SUNFLAG IRON & STEEL Cash Flow Statement Analysis

• SUNFLAG IRON & STEEL's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 6.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -603 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 122 million from the Rs 46 million net cash flows seen during FY20.

SUNFLAG IRON & STEEL Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	2,091	2,230	6.7%
Cash Flow from Investing Activities	Rs m	-1,254	-603	-
Cash Flow from Financing Activities	Rs m	-792	-1,505	-
Net Cash Flow	Rs m	46	122	167.4%

Current Valuations for SUNFLAG IRON & STEEL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.8, an improvement from the EPS of Rs 5.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 62.8, stands at 8.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 4.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	97.6	105.0
TTM Earnings per share	Rs	5.1	7.8
Diluted earnings per share	Rs	5.1	7.8
Price to Cash Flow	x	3.1	4.1
TTM P/E ratio	x	4.7	8.1
Price / Book Value ratio	x	0.5	0.6
Market Cap	Rs m	6,447	8,569
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for SUNFLAG IRON & STEEL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.1x during FY21, from 1.6x during FY20. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 6.8x during FY21, from 3.3x during FY20. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 9.2% during FY21, from 6.7% during FY21. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 11.6% during FY21, from 9.0% during FY20. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 7.0% during FY21, from 5.6% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	1.6	2.1
Debtors’ Days	Days	460	406
Interest coverage	x	3.3	6.8
Debt to equity ratio	x	0.1	0.1
Return on assets	%	5.6	7.0
Return on equity	%	6.7	9.2
Return on capital employed	%	9.0	11.6

To see how SUNFLAG IRON & STEEL has performed over the last 5 years, please visit here.

SUNFLAG IRON & STEEL Share Price Performance

Over the last one year, SUNFLAG IRON & STEEL share price has moved up from Rs 24.2 to Rs 62.8, registering a gain of Rs 38.6 or around 159.3%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 14,350.6 (up 0.4%). Over the last one year it has moved up from 5,713.3 to 14,350.6, a gain of 8,637 points (up 151.2%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

(To know more, check out historical annual results for SUNFLAG IRON & STEEL and quarterly results for SUNFLAG IRON & STEEL)

Read: Latest Annual Report Analysis of SUNFLAG IRON & STEEL